Tuesday, October 19, 2010

State of the Stock Market - 10/19/10

Due to time constraints, I can't write too much today.   It was a busy day on Wall Street - certainly not a good one with large losses across the board.   No one was spared from a beatdown today - oil, gold, and tech were all killed.   That being said, I think it is too early to say if this is the end of this rally for good or just a well-needed pullback.   I said yesterday that we were very extended so a sell-off like today was not unexpected.   We'll have to see if we get follow-through tomorrow - if we do and break below the 20 day moving averages on more heavy volume, I expect the 50 day moving averages to be tested soon after.  

I was quickly stopped out of my HEAT position from yesterday and right now only hold ALGN.   Since it reports Thursday, I will likely be out of that soon as a precautionary measure unless it bounces tomorrow and gives me a cushion.   Overall, I would be very careful right now - a cursory look at my scans shows quite a bit of damage on individual stocks so I would not be buying the dip yet, especially with more news via earnings reports coming the rest of this week. 

Sorry for the brevity today - I have things to do.  Overall, be very careful - today could be the first shot across the bow for the bears.   Pay attention to it.   Good luck Wednesday.

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